Neogen Chemicals Limited IPO
1) They are one of India’s leading manufacturers of bromine-based, and lithium-based, specialty chemicals. Specialty chemicals are those chemicals that impart different properties to a variety of products.
2) Specialty chemicals, including bromine and lithium-based compounds, are used in the following industries with indicative Revenue contribution:
a) Pharmaceuticals = 58%
b) Agrochemicals = 15%
c) Engineering = 17%
d) Polymer = 3%
e) Electronic= 1% and others= 6%
The company market and sell the Products in India and export the Products primarily to Europe, USA, and Japan.
3) The company which was producing few Bromine and Lithium compounds at the commence of its operation in 1991, today, expanded the range of products and, presently, manufacture an extensive range of specialty chemicals which find application across various industries in India and globally.
As on February 28, 2019, they have manufactured an aggregate of 198 products comprising 181 organic chemicals and 17 inorganic chemicals.
4) The company has two manufacturing plant and third is at development stage:
a) Mahape, Navi Mumbai in Maharashtra (Mahape Facility).
b) Karakhadi, Vadodara in Gujarat (Vadodara Facility).
c) Presently, they are developing a green-field manufacturing unit in Dahej SEZ, in Gujarat (Proposed Dahej Facility) and are also proposing to expand the operations in Karakhadi, Vadodara (Proposed Vadodara Facility).
5) They have 2 R&D facilities, one each in at Vadodara and Mahape manufacturing units. They have dedicated 20-member R&D team constituting around 10% of our total workforce.
Since the commencement of the dedicated R&D department in December 2001, the Product portfolio has grown from around 20 products in 2001 to 198 products at present.
6) Apart from the specialty business, the company is also looking into contract manufacturing to increase their portfolio.
Contract Manufacturing: Under this arrangement, the company manufactures different products as per the specific demand of the customer. They are in discussions with various companies in Europe and Japan to develop their proprietary products for which they have already executed non-disclosure and secrecy agreements.
1) Specialty chemical is a key segment, valued at $743.80 billion in 2017 and expected to grow at CAGR of 5.7% up to 2022.
2) Agrochemicals dominated the specialty chemicals revenue pie, accounting for a 21% share in 2017. The use of agrochemicals in fertilizers, herbicides, insecticides, and pesticides is rising because of increasing demand for agro products owing to rapid industrialization and population growth globally.
3) The polymers and plastic additives segments comprised the second-largest revenue share at 13.5%.
4) Market share of specialty chemicals of key countries in 2017:
a. China = 40%-44%
b. USA = 14%-17%
c. Germany = 4%-7%
d. Japan = 4%-5%
e. India = 2%-3%.
5) Some of the key challenges faced by the global specialty chemicals market are the commoditization of products, unavailability of raw materials, and regulatory issues and environmental concerns. China is considered to have the worst air quality in the world following its rapid industrialization, fuelled by coal – the cheapest but highly polluting energy source, which the country has in abundance. With the government clampdown on polluting generating industries in several cities across the country, China’s production of chemical raw materials and chemical products grew at a more moderate on-year pace between January and October 2017.
Objects of the Neogen Chemicals Limited IPO:
Neogen Chemicals Limited IPO Details:
|Open Date:||Apr 24 2019|
|Close Date:||Apr 26 2019|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Building|
|Issue Size:||132.35 Cr.|
|Lot Size:||65 Shares|
|Issue Price:||₹ 212-215 Per Equity Share|
|Listing Date:||May 08 2019|
Financials of Neogen Chemicals Limited IPO:
|Balance Sheet Item|
|Key Ratios and Valuation|
Comparison With Peers:
|Particulars(Cr)||Neogen Chemicals||Aarti Industries||Navin Fluorine||Paushak Limited|
|Balance Sheet Item|
|Revenue Growth in 3 years||22.89%||16.52%||20.98%||15.1%|
|EBITDA Growth in 3 years||44.12%||10.54%||46.32%||29.78%|
|PAT Growth in 3 years||43.49%||11.98%||43.87%||32.29%|
|Key Ratios and Valuation|
|Mcap||501 Cr||14040 Cr||3510 Cr||678 Cr|
|EV||612 Cr||15860 Cr||3489 Cr||678 Cr|
Recommendation on Neogen Chemicals Limited IPO:
Lead Manager of Neogen Chemicals Limited IPO:
Registrar of Neogen Chemicals Limited IPO:
Bid Details of Neogen Chemicals Limited IPO as on
26-Apr-2019 20:30:00 IST
Total Number of Applications in Retail Category: 5,02,000 Approx
Application-wise Subscription in Retail Category: 15.15X